What is KYC and how does it prevent risks in your company?

The culture of prevention is something that few companies used to practice, however, with the advance of technology, new threats have been presented and others have been enhanced, which has led more companies to be more aware of the risks and their consequences. Thus, more and more companies are concerned about developing risk management strategies within their processes to ensure their investment and development.

For these companies the term KYC, or Know Your Client, is very familiar, but if your company is still unfamiliar with this term, or you simply want to go into more detail, here we explain more about this process and how it works.

What is KYC?

KYC is a process of verification and validation of information focused on authenticating individuals and companies that purchase services from others, i.e. customers. The purpose of this process is to find out if the company contracting the services has been placed under investigation for fraud, money laundering, terrorist financing or any other crime.

Often these companies are part of corruption chains and make payments with money of illicit origin, which can get you in trouble with the authorities in the future. In 2020, a KPMG survey found that 72% of companies in Mexico consider corruption in the country to be a problem that represents losses for the organization, of which 90% agree that these losses range from 5% to 35% of net profits.

KYC, an efficient way to combat fraud in your company

That is why it is important to verify the background of your customers is important for risk prevention of companies, seeking to rule out customers who are potential risks before entering into relationships.

Likewise, this process can help you prevent your company from being involved in scandals that put its reputation at risk, as well as prevent your processes and platforms from being used to commit crimes, combating illegal national and international transactions, corruption and money laundering.

What does this process consist of?

Like other verification processes offered by BlackTrust such as the background check, this process consists of searching for information on the selected companies in governmental and other organizations’ databases. Thus it is corroborated:

• La identidad de la empresa (identity Check).
• Los documentos de identificación.
• Si se trata de una Persona Políticamente Expuesta.
• La nacionalidad del cliente.
• Revisión de Listas de Personas Bloqueadas (69B SAT, ONU, GAFI).
• Más de 180 Listas de Sanciones Internacionales.
• Adverse Media News.
• BGC Legal.
• BGC Internacional (must wanted).
• Identificación de delitos como lavado de dinero y corrupción .

It is through the verification and validation of your customers that your company can comply with the laws and solidify its processes, improving its services and increasing the preference of reliable, honest and committed to social welfare customers.

Do you want to implement KYC in your company? Contact us and start implementing this verification process as part of your risk management strategies.